Steve Kelman: A passion for procurement reform

For Federal Computer Week's 25th anniversary issue, we highlight some of the people, policies and technologies that have influenced federal IT. Although it is not possible to include all the dynamic and dedicated people who have been or still are a part of this marketplace, we start with some who have left their mark.

Change comes slowly in government and usually in small steps, but in the early days of the Clinton administration, a commitment to change the way the government acquired goods and services brought together a bipartisan team from Congress and the executive branch to sweep away more than 20 years of procurement rules.

Leading the effort for the executive branch was Steve Kelman, administrator of the Office of Federal Procurement Policy at the Office of Management and Budget.

Government purchases are bound by comprehensive regulations that are designed to ensure fairness, competition and due process, but they often lead to a focus on compliance instead of getting the best value for the agency, said Kelman, now the Weatherhead Professor of Public Management at Harvard University’s John F. Kennedy School of Government.

“There’s always a tension between mission support and best value versus control and compliance,” he said.

The challenge was to free purchasers to think like business people — in other words, to use the volume of their buys to get better pricing and better value and take advantage of ready-made commercial products whenever possible.

When Kelman and several lawmakers joined forces, they broke through the surface of a hardened procurement landscape. “This is when a cultural shift occurred,” said Trey Hodgkins, senior vice president of national security and procurement policy at TechAmerica.

Congress passed the Federal Acquisition Streamlining Act in 1994 to lower the barriers to procurement by advocating simpler ways of purchasing and the use of commercial items. The law also promoted the use of fixed-price contracts. Similarly, in 1996, Congress passed the Federal Acquisition Reform Act to give contracting officers more discretion in determining the best prices and to push for full-and-open competition while creating tougher rules for the use of non-competitive contracts. That act was combined with the IT Management Reform Act to become the Clinger-Cohen Act.

The reforms also put more emphasis on companies’ performance. In the old days, contracting officers would check qualifications and detailed bids but not how the company had executed its previous jobs. “They never asked if they did it well,” Kelman said. Past-performance reviews are now a key element of the decision-making process.

“The mid-’90s was the golden era for procurement reform,” said Olga Grkavac, executive vice president for the public sector at TechAmerica. “It is hard to overemphasize the critical role that Kelman as the OFPP administrator played in making this happen. There were many key players, but most would agree that Kelman’s passion and determination to obtain real reform were pivotal to this success.”